Restaurant Recession or Revival? Vegan Eateries Set To Thrive

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“In 2018, when my partner’s (not exclusively vegan) restaurant was at the peak of its success, I convinced him to get out of the industry forever. The way people eat is changing, I argued. He agreed.” Says Veronica Fil.

“So much that we left the restaurant industry to become plant-based cheese entrepreneurs—much to the confusion of almost everyone we knew.

It didn’t make sense because at the time, Australia’s fine dining scene was having a moment—and we were part of that boom. It felt like even the most trivial restaurant industry news would make national headlines (who’s opening? Who’s closing? Who’s about to launch a new menu featuring native foraged sea-greens?). High profile chefs were getting treated like rock stars, flexing their tatts and headlining festivals in exchange for luxury car sponsorships. And for the small number of restaurants that offered dedicated vegan menus—ourselves included—business had never been better.

Behind the scenes, however, the reality was far less glamorous. Australia’s hospitality industry was poisoned by wage scandals. By precariously thin operational margins, negative workplace cultures and questionable HR practices. By the constant threat of predatory players like UberEats, who were gouging independent restaurants with obscene commissions and questionable policies, and the ongoing shift towards casual dining options (continually creeping towards lower cost, quick service solutions). Chefs and independent operators were busting their butts to get by, working insane hours just to keep their businesses afloat. The industry was completely unsustainable, and we decided that it was time to get out.

Fast forward to 2020, and I’m grateful for our timing. Because, while I sensed a crash was looming, I certainly never expected to see the entire industry collapse overnight due to Covid. Not just in Australia either, but all over the world where dining rooms have been ordered to shut—and restaurants try to navigate a new environment of uncertainty, confusing regulatory guidelines, and economic hardship.

vegetables vegan law
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So what’s this got to do with veganism?

Well, it’s all happened at a pretty interesting time in history. Even before Covid, the move towards plant-based eating was happening at monumental force–and there were more vegan restaurants popping up each week than ever. Even traditional restaurants had stopped fighting the ‘trend’ and were beginning to provide decent plant-based options on their menus.

Unfortunately, very few of these businesses were built to withstand a global pandemic. Those that aren’t equipped for takeaway or delivery have closed; a large number will never reopen. And that feels like a huge setback to the progress of vegan dining.

Or so you’d think.

See, I’m one of those irritating people who seem hardwired to find the opportunity in even the most dreadful situations. And while I’m saddened to watch the impact that Covid has had on the traditional hospitality industry, this is the chance for vegan businesses to take the reins and help us rebuild this industry for the better.

Credit: Veronica Fil

Opening a Vegan Restaurant During Covid

According to Happy Cow, there have been 88 vegan restaurant closures in the US since March. But in the same period, there’s been 99 new ones added to their online database. On face value, those stats appear pretty crazy.

But let’s break that down. From a purely economic perspective, here’s why bullish business owners might be seizing the opportunity to open a vegan venture during a global pandemic.

  • Home cooking fatigue. Just because restaurants are becoming extinct, doesn’t mean that people don’t want to eat in them. As social distancing restrictions ease, I expect restaurants to become overwhelmed with diners who are just relieved to be outside again (and are desperate for a meal that’s not homemade sourdough). There will always be a demand for restaurants.

  • Reduced set up costs. Right now, the market is flooded with second-hand equipment from businesses that have been unable to survive the turbulence. The mass exodus has also caused rents to drop, and lease terms become more favorable.

  • A boost to the talent pool. Finding and retaining high-quality hospitality staff was previously one of the most difficult aspects of restaurant-running. But as unemployment levels rise, there’s a legion of experienced hospitality professionals who are available, and desperate, for work.

    Credit: Veronica Fil

  • Record low-interest rates. Near 0% in the US and 0.25% in Australia (as of July 2020). The aim of this monetary policy maneuver is to drive lending (and spending) at a time when economic activity needs a boost. Expect to see additional government incentives and small business initiatives announced in the coming months.

  • Lower competition. Even multi-location restaurant empires are crumbling at the moment, which makes it much easier for small businesses to wedge themselves into the market—with less threat of behemoth competition.

  • Consumer-driven demand for alternative proteins. As covid fears continue, people are rethinking their relationship with animals and food…and decided that this meat-eating thing isn’t worth messing with. Any restaurant that can offer a tasty, healthier and more sustainable alternative is going to win their business.

The rise of vegan restaurants in Brighton
© Lauren Dudley

While these points shape a decent business case, I don’t think they’re enough to convince me to open up a dining room any time soon. They do, however, suggest some very favorable conditions for restaurant businesses that can cater to the new dining landscape. It makes total sense, for instance, to see new delivery-only or takeaway vegan restaurants pop onto the scene.

Recent data collected by online delivery platforms backup that thought. Last month, DoorDash reported a huge increase in the number of vegan burgers that people had ordered during the first six months of 2020. That’s good news for eateries that are set up for casual dining, but not so great for the struggling Michelin Star venues…many of which are being replaced by dark kitchens. Whether or not this is a bad thing depends on which side of the equation you are, I guess.

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For any existing restaurant owner, the impacts of the pandemic must be devastating. But economically, I’d argue that the model was doomed from the start—and long overdue for a rethink. Covid has forced us to do that. I hope that it leads to fresh perspectives, greater diversity, and more opportunities for plant-based businesses to get a foot in the door. The new dining landscape, as it regrows, looks lusciously green.”